Gold today fell after four sessions of gains, heading for the longest run of monthly losses since 1997, as mounting confidence that economies are recovering curbed demand for a protection of wealth.
Gold fell 0.3 per cent to $ 1,609.77 an ounce. It reached a one-week high of $ 1,620.37 yesterday, rebounding 4.2 per cent from the seven-month low of $ 1,555.55 set on February 21. Silver also fell 0.8 per cent to $ 29.16 an ounce.
Gold is set to drop for a fifth month and holdings in exchange-traded products backed by the metal are sliding on signs that global economic growth is improving and as some Federal Reserve policy makers advocated more flexibility in stimulus.
Bullion gained in the past four days amid political turmoil in Italy and as Fed Chairman Ben S Bernanke defended the central bank’s asset purchases yesterday as a support for the US economy.
ETP holdings fell to a five-month low of 2,530 tonnes yesterday, and are down 3.1 per cent this month, the most since April 2008. The cycle for gold prices has probably turned as the US recovery gathers momentum and investment slows, Goldman Sachs Group said.
The metal is down 3.9 per cent this year after rallying the past 12 years as nations from the US to China pledged more steps to bolster economic growth.